US copper down

US copper futures settled lower on Tuesday as a sharp decline in Chinese monthly import figures signalled slower demand growth from the world's leading consumer of the industrial metal, analysts said.
China's imports of copper, including semi-finished products, fell 28 percent to 220,561 tonnes in May compared with more than 300,000 tonnes in both March and April. Imports in the first five months of the year rose 58.5 percent from the year before to 1.3 million tonnes, customs said. Catherine Virago, an analyst with CPM Group in New York, expected Chinese imports to continue to trend lower as the market moved into the seasonally slower summer months.
"The fact that we have the summer slowdown, both for the fabricators and for investors, should put the market more on the defensive," Virago said. Copper for July delivery ended down 6.90 cents to $3.2870 a lb. on the New York Mercantile Exchange's Comex division, after dealing between $3.2580 and $3.3620.
Traders pegged nearby support in July copper at Friday's low at $3.2440, followed by the May lows at around $3.1650 to $3.17. Resistance continued to lurk at $3.50, they said.
Final copper futures volumes were estimated at 22,942 lots, better than the 18,482 lots recorded on Monday. As of Monday, June 11, open interest in Comex copper futures declined 976 lots to 77,831 contracts. Sentiment took a further hit after the Chinese government reported annual consumer price inflation of 3.4 percent for May its highest in more than two years.
The inflationary data reinforced expectations that the country will need to raise interest rates to cool the rapid pace of its economic growth. "As the Chinese stock market continues to climb, the fears rise that China is going to raise rates again, and I think that is the backdrop that is kind of overhanging the copper market right now," said Michael Gross, an analyst with Liberty Trading Group in Florida.
"It' a big fundamental that is putting a lot of pressure on the market right now," Gross said. A two-month high in the dollar versus the euro placed additional pressure on the metals markets on Tuesday, as rising US Treasury yields lured investors.
In afternoon trade in New York, the euro was down 0.3 percent from late Monday at $1.3323, after touching a two-month low of $1.3311. A stronger dollar typically makes dollar-denominated assets, like copper, more expensive in overseas markets.
However, a bullish background of labour unrest and falling copper stocks continued to offer support. More than 400 unionised workers at Strata Plc's CCR copper refinery in Montreal are on strike after talks with the company broke off, company and union officials said on Monday.
In Chile, workers at Collahuasi, one of Chile's largest copper mines, said they planned demonstrations later this week to demand an improved labour contract proposal from mine managers. In Mexico, workers at the country's largest copper mine have backed a strike call by their union, bringing a threatened stoppage one step closer at nine Group Mexico operations later this week.
London Metal Exchange copper warehouse stocks fell 225 tonnes to 120,325 tonnes on Tuesday, while Comex stocks were flat at 26,113 short tons on Monday. LME copper for delivery in three months was down $185, or 2.5 percent, at $7,175/$7,180 after rising 3 percent on Monday.